KUALA LUMPUR: Dialog Group Bhd will continue to be one of the key beneficiaries of the Pengerang Deepwater Terminals (PDT) development due to its exposure in the midstream and downstream divisions.
RHB Research said in the near term, independent terminals could be buoyed by better utilisation and monthly storage rates while new capacity expansion could be on the cards.
It said 190 vessels berthed at PDT last month and the total vessels berthed year-to-date stood at more than 1,300, which was higher than FY22's 1,170 vessels.
The bulk of the products were shipped from the Middle East.
"As such, Dialog guided that independent terminals have seen better utilisation rates of closer to 95 per cent, versus 90 per cent in the previous quarter, and the monthly spot storage rates are now at above S$6 per cubic metres (cbm) from mid-S$5 per cbm last year.
"Meanwhile, earnings impact for Pengerang Terminals (Two) (PT2SB), is largely unaffected although the Pengerang Integrated Complex (PIC) commercialisation was delayed due to its take or pay structure.
"Payment wise, it is expected to catch up in the near term as PIC commercialisation is scheduled in the second half of 2023," it said.
RHB Research added the overall operating expenses for storage terminals had been fairly manageable.
Due to the increase of manpower cost and raw material prices, Dialog guided that the engineering, procurement, construction and commissioning (EPCC) cost of storage terminals had increased to RM2,000-RM3,000 per cbm, as compared to PT5's EPCC cost of RM1,800 per cbm.
"Should it be able to lock in new capacities with clients, we estimate the project's internal rate of return (IRR) to still fetch 8.0-12 per cent.
"There is still no update on the new dedicated tank terminal expansion, but there were more site visits arranged recently with potential clients and management is hoping to see some expedition in the near term.
"The Pengerang fabrication yard is also poised to benefit from the potential EPCC and maintenance works if there is new capacity expansion in Pengerang," it said.
RHB Research maintained a "Buy" call on Dialog with a target price of RM2.98.
